This week I thought I would share with you a lack-luster customer experience that could have easily been several times better!

Good morning, I hope you have a great Monday morning.
So I’m here in Portland for conference and I’m staying at a hotel – which will remain nameless. It’ been a good hotel but there’s a few small problems that I thought I’d use as situational or great examples for you to help you win your own business.

As you walk in it’s a nice clean room (except for my junk sitting on the bed) Nice, clean room. Not a whole lot, a standard hotel. They’ve added a big screen TV very nice, very flat brand-new but here’s the problem: It doesn’t move. They’ve got a little disclaimer right her. It says that it doesn’t move around and if you break it you’ll pay for it. So, if I wanted to sit on the couch, watching TV might pose a problem. A minor inconvenience, but one that can damper your experience and make it that much less enjoyable.

Also, I like a lot of work in the evening so I have a nice desk here (even though it’s a little crowded with the coffee pot.) If I want to set up my laptop and get some work done maybe I could just move the coffee pot but . . . there’s no Internet to plug into. There’s no cord for me to get some high-speed Internet. This is a phone jack but it is not a high-speed Internet jack. I don’t usually make the habit of bringing an Internet cord with me.

That was just a couple of things. But this is the one that really got to me. I got up this morning ready to use the fitness room that was so avidly advertised. However my key didn’t work. I just thought it was a problem with my key. I go to the front desk and first of all the guy at the front desk wasn’t at the front desk, he was sitting on the sofa in the lobby watching TV. Just saying. But when he did finally recognize that I was standing there, his comment was that the fitness room doesn’t open until 10 o’clock because it might wake up the other guests. That kind of defeats the purpose. Most travelers, (I’m not going to say most because they’re some that do it in the evening) but many are going to want to do it in the morning . And they’re not going to want to do it after breakfast and they’re not going to want to do it an hour before checkout at 11 o’clock. Just some observations.

These are all good examples of ideas and marketing thoughts that they had. Things that they do to enhance the customer experience but they didn’t follow it all the way through, they didn’t think it all the way through.

That’s what I want to challenge you for this week:What amenities, what little tweaks, what additions are you giving your customers that perhaps aren’t giving them what they asked for? It’s a nice thought, but because it’s not all the way thought through, they’re more angry than they are thrilled. Just think about that this week and implement and follow through on what you’re doing. We’ll see you on the other side.

A business is nothing more than a system of systems that creates value. And every business needs five basic systems, which I call the Five Foundations of Business:

Discover the five foundations your organization needs to succeed.

Marketing—Finding the quickest path to the sale.

Management/Leadership—Identifying the destination, developing the path, and creating a team to accomplish it.

Operations—Delivering the service.

Finance—Managing the value created through superior marketing and operations.

Systems/Controls—The grease and glue that keeps the other four Foundations moving smoothly and holds them together.

Getting these systems to work for you as efficiently as possible is the essence of creating a successful business. Once you have created and fine-tuned the systems, it becomes much easier to sell your product, create viral word-of-mouth, hire employees, lead and manage them, expand into new markets and additional sites, and to franchise. Plus, life is easier and more enjoyable when your business generates income for you and your lifestyle. Finally, the systems make it possible for you to create a business worth selling when you’re ready to retire or move on to your next venture. Of course, within those categories, how the specific systems that create widgets, tools, knick-knacks, food, services, or experiences will work depends entirely on you as the business owner.

If you decide to read Building Your Booming Business, take the time to review your systems. Where is the hand-off from one system to the next? What systems are missing or not performing as well as they could within each of these “Business Foundations?”

Why should you trust me? What makes the material in Building Your Booming Business worth the time to read and implement?

I have always had an entrepreneurial bent. At eleven years old, I used the drawing program on my dad’s IBM 286 to make a half-page flyer advertising that I was available to do a variety of odd jobs. Then I distributed about 100 of them throughout my neighborhood. I had a few calls over the next couple of weeks to mow lawns, babysit kids, and a number of similar tasks. Within a couple of weeks, I was bringing home about $150 a week. A year later, one of my customers, who was the general manager for a local lumberyard, asked me to give him a bid for regularly mowing about two acres of grass around the business. Once I sealed that deal, I was bringing in an additional $120 every ten days. In 1989, that was a lot of money, especially for a twelve-year-old. Don’t worry; I spent most of it irresponsibly.

Since then, I have run business organizations as large as 200 employees, increased revenues by 40 percent in less than three months, and have battled almost every operational obstacle imaginable. I even had to pull a department out of a financial disaster.

More importantly, I have successfully coached scores of other entrepreneurs, managers, and owners on how to be successful doing the same things I have done. Many of them have more than doubled the sizes and profits of their businesses, created more time for themselves, and even sold their businesses for profit.

Why would what I have to share in this book work for you? You’ve probably tried training programs and systems before. You’ve tried seminars, books, coaching, and spent lots of time trying to get your business to break barriers.

The reason I know that what I have to share can help you take your business to the next level is that I have actually implemented, either in my own business or in the businesses of my clients, every concept in this book, and I have seen great successes as a result. Even if you only use one of the strategies I offer, you can move your business forward, or you can apply all of them to make your business boom.

I was seriously considering the service of a specific business, but the timing was not right. We were about to set a follow-up time when he started mentioning the network marketing business he was part of. He wanted to know whether I would be interested.

I experienced an inconsistency in message. Do you sell insurance or makeup? I am not opposed to complementary products, or even having a side businesses; just make sure your potential client knows to whom she is talking.

If you are sending mixed signals to your target market, it is not intentional. Most of us do not want to be thought of as dishonest. When your message is inconsistent, your potential client starts to think you would say anything to get the sale.

On the other hand, repetition is the best way to learn something. If you are constantly beating the drum about how your client’s life will be easier, more exciting, more safe, more delicious, or more anything, she will be more consistent in buying from you.

Consistency in Frequency

Jay Conrad Levinson, in his book, Guerilla Marketing, explains how a customer needs to be exposed to your message seven to nine times before she makes the decision to buy. However, a customer only consciously acknowledges your message one out of five times. Therefore, she needs to be exposed to it forty-five times before she is ready to buy.

While those numbers are staggering, you can improve them with targeted marketing, great content, and being consistent in your frequency.

If you are running ads on your local radio station and have decided to buy fifty spots, it would be better to run the ad three times a week at the same time (or on the same day and time over an extended period), than to run the ad at fifty random times for the next month.

A customer will be more likely to place trust in you if she is hearing you over several months because she perceives longevity in your business. That longevity communicates several desirable aspects of your business. It tells folks you are successful—and if other people are buying from you so much you can stay on the radio for several months, then you must be good. It tells them you are going to be around if they have any problems with your product. It also tells them you are interested in the long-term and not just a quick buck.

A quick caveat to consistency in advertising: This is for advertising that has already been tested and shown to be effective. As I mentioned before, direct-response marketing is the most effective for small businesses. Make sure your consistency in marketing is not a “branding” campaign.

Consistency in Follow-Through

The money is in the follow-up. That is one of the major differences between old-fashioned ads and today’s direct response sales process. Failure to follow up with a prospect or customer is why most sales don’t happen. Remember that it takes seven to nine conscious exposures to you before clients buy. If you already know who those clients are and how to contact them, why are you waiting for the other forty-four advertising exposures? Call, email, send a letter, knock on the door. Follow through with potential clients while building a relationship.

While you are following up, remember the long-term plan. Clients may not be interested now, but life changes, businesses move, employees quit, contracts are lost. You may only contact a potential client once a year. You won’t know what has changed until you call him or her.

Be consistent in your message and don’t let potential clients down. Your ability to follow through will impress them and develop a higher level of credibility.

If you are ever to get through to your customers, you have to begin to cut through the advertising clutter that is choking them.

By implementing the 4Cs (Content, Clarity, Consistency, and Call to Action), your marketing message will better resonate with the niche that we established in the last chapter. You can begin to develop a deeper relationship with your customers because they feel that you understand them and are speaking directly to them. They trust you more because you communicate clearly and simply who you are and how you help them. That trust is again increased as they see your consistency across time and by experiencing your business in different ways—yet always consistently. Finally, you have given them a clear next step with a specific call to action. They know exactly what to do next and you have made it easy for them to do it.

Teams move through recognizable stages: Forming, Norming, Storming, and Performing. Volumes of research have been done on these stages and how to manage them. Let’s take a look at some of the basics.

Each stage has its own characteristics and dynamics. Leading them through these stages quickly can determine whether your team will succeed or fall apart.

Forming: Participants have high energy and are excited to get started, but they have little direction or knowledge in the challenges they face. A leader at this stage will mostly need to use the directive style of leadership.

Storming: As it develops, your team will move into the Storming stage. Members will vie for position and try to define their role in relation to the rest of the team. At the storming stage, there is still a great deal of energy and enthusiasm. But as the team grows in knowledge and ability, people will begin to overstep each other’s boundaries or leave large gaps in performance. Boundaries and responsibilities are still being defined in this stage as team members start to ask, “Why?” You will need to use more supportive tactics when working with a team in this stage. Many teams never leave this stage and ultimately fail without effective leadership.

Norming: Once the fighting is over, you will see your team begin to “figure it out” or start Norming. They get along better, fewer balls are dropped, and respect for each other’s abilities increases. Their own knowledge and skills are growing, requiring less oversight from you. The downside is that a lot of the team’s energy has been sapped from the storming stage. Some of the conflicts have made team members skeptical. Your team members now need to feel they can self-direct their activities. They still need parameters from you and facilitation to help them work through new problems and help them avoid slipping back into the storming phase. Those skills are the essence of the consultative style of leadership.

Performing: Few teams ever make it to the Performing stage. Most rest comfortably at Norming and flow between the bottom three stages frequently. Teams in the Performing stage have regained the energy they had in the Forming stage, but they can now couple that with a high level of expertise and knowledge. You will see your team start to care more about results and care less about material or emotional incentives. It will also care less about processes and can comfortably suggest better ways to get the work done. This is the moment that every leader wants—give people the tools and get out of their way! When a Performing team reaches this pinnacle, your job as leader is to facilitate resources and focus your leadership on keeping your team members performing.

While most teams never reach the Performing stage, those that do don’t stay there long. They will slip into Norming when energy is lost or frustration with circumstances steps in. They can even drop all the way back to Storming if there is a change in the team’s dynamic, or if a new challenge the members are not prepared to face springs up. If you ever have the chance to lead a Performing team, your job is not done. Keeping the team there can prove difficult.

Team Stage

Forming

Storming

Norming

Performing

Attributes

High Energy/
Low Skill

High Energy/
Growing Skill

Low Energy/
Moderate Skill

High Energy/
High Skill

Needs

Need strong systems and clear direction

Asking “Why?”

Self-directed with clear parameters

Results biggest motivator

Leadership Needed

Micromanager, autocratic, set high expectations

Teacher, Set boundaries, Increasing expectations

Coach, Inspire, “Lead”

Facilitator, Resource, As-Needed clarification, Inspire

Penalties/
Rewards Structure

Clear and Stark Penalties/
Rewards

Clear Penalties/
Rewards

Natural Consequences, Some Leader-Enforced consequences

Few Penalties or Rewards outside of Natural Consequence

Manager Vs. Leader

Manager

↑Manager
↓Leader

↑Leader
↓Manager

Leader

There are three things to keep in mind constantly while leading your team through the stages:

How a team progresses from one stage to another depends entirely on you as a leader. While certain styles are best used in specific stages, you must continually look for ways to present small introductions to the next level. Some of the responsibility lies with the team members themselves. You will see natural leaders arise within the group who can either be your allies or your nemesis.

Team selection is just as important as leadership in a team’s success. For team selection ideas, read Chapter 9: The Miracle Team.

Teams do not move through the stages in a nice, neat line. They will often jump around and surprise you. Your success depends on recognizing the stage and knowing which style is best for the moment.

The number one reason why banks fail? Cash. Reason why the mortgage and housing business went belly-up? Cash. The real difference between the rich and the poor? Cash.

Let me qualify this. There are assets that create wealth over time. Usually when you think of assets you think of houses, investments, etc. However, you still have to manage the cash that these assets produce.

It’s not enough to take home a profit. Cash in the business will give you flexibility to overcome down-turns and take advantage of unexpected opportunities.

I think it’s a good idea to look at a few strategies that will help you keep a bigger cash reserve and not run so close to the margins.

Collect revenue quickly.

This may sound simple, but I’ll bet you’ve had this problem. A big part of collecting starts before the project does.

You have to develop a discipline of billing and create systems to support it. Most A/R problems happen because of miscommunication or false expectations between the client, the contractor, and the billing office. So set your system and your processes to eliminate both.

Determine your payment policies.

If you are providing large-ticket items that may require you to finance or spread out payments for your clients, how you receive payment should be part of the proposal, explained from the beginning, and carefully laid out in all of your agreements. Deposits and expected payments depend on the size of the job or deliverable. The bigger the job, the lower the overall percent you will need to get the first few weeks of work started. Some jobs you may be able to collect only the material costs up-front and spread out payments as you need them. In many instances you should get half the agreed price up-front.

Regular and prompt invoices.

Again, this depends on the size of the job. For smaller products, invoices need to be delivered and collected the day of completion. On larger projects make sure you are billing monthly or every 15 days. Billing this way eliminates lags in your cash and also prevents sticker-shock for the customer. A side benefit is how much more closely you watch your material and supply costs associated with each job.

Price appropriately.

This is not just to help you win large proposals – this includes the services, materials, and supplies that you provide. A 2% change in your net revenue can mean a 30% change in your profits.Here is a profit and loss that I analyzed for a small contractor and how I suggested he make changes.

By increasing what he charged for labor and materials by 20% we were able to more than double his gross profits.

He was concerned that this would lose him bids – it didn’t. Instead he found that he was no longer in a bidding war. His customers were less likely to nickel-and-dime him on every little thing because they could see that he did not cut corners.What profits are you missing out on by not pricing appropriately?

Review your overhead regularly.

I was sitting with a client not long ago and had suggested to him that he needed to raise his hourly rate. Over the months that we worked on his leadership and organization, he continued to resist raising his price. One day he had an epiphany. He wasn’t making enough money to cover his overhead and was not including his overhead costs in his bids. He decided he needed to raise his prices.

You would be surprised how a 2% change in an overhead cost like insurance can drastically impact the bottom line. Take your P&L and your cash flow statement and take it line-by-line and create a strategy on how to trim 1% from each expense.

While this is not an all-inclusive list, these are some of the easiest areas to review and keep in line.

Labor – Do you have a staffing model that ties labor hours to production/revenue? How often is your staff going into over-time? Are you leveraging your own efforts by delegating properly?

COGS – Do you know exactly how much of your raw materials go into your product? For restaurants this means portion control and strict recipes. For a contractor this means knowing how much material will be scrapped and how much of it you can “up-cycle” (or use in creative new ways?).

Taxes – When was the last time you had a CPA check your taxes and not just prepare them? If your CPA or tax preparer is only preparing your reports and returns and not suggesting tax savings, it’s time to find one who does.

Insurance – Whether it’s your liability, worker’s compensation, or employee benefits, having this reviewed and bid out to several providers every year can drastically reduce how much you pay.

Facilities/Equipment – How much you pay in up-keep and repairs might be more than what it would cost to get new equipment.

By regularly reviewing your overhead as you look at your budget, you can increase your profit by tens of thousands of dollars every year.

A word of caution: Cutting expenses is good stewardship of your business and can really help you focus on what is most important for your continued success. The danger here is that a short-term gain in profitability by cutting expenses can hurt your long-term growth potential if you aren’t careful. Do your research to make sure you aren’t cutting yourself off at the knees.

If you are going to have a successful business, control your money. Don’t be ashamed to get paid what you’re worth. collect it quickly, and then be fastidious about how spend it. Cash is the fuel to your business. Don’t starve it to death.